Allied Maples Group v Simmons & Simmons [1995] 4 All E.R. 907
If you’re a law student, you might find the case of Allied Maples Group v Simmons & Simmons [1995] 4 All E.R. 907 really interesting. It’s an important case that explores the complexities of professional negligence and how damages can be recovered for the “loss of a chance.” In simpler terms, the case looks at what happens when someone receives bad advice from a professional that causes them to miss out on a potential opportunity. It’s definitely worth checking out!
Facts
C wished to acquire multiple furniture shops belonging to X. D acted as their solicitors in this matter. D wrote up a contract containing a warranty clause, allowing C to obtain the shops without being bound by X’s previous liabilities. During negotiations with X, this warranty clause was deleted and replaced with a clause that did not offer this protection. D failed to advise C on the effect of the replacement clause. As a result, the acquisition went ahead. From May 1990, C was subject to claims stemming from defaults on the properties they had acquired from X. In May 1991, C brought proceedings claiming damages for D’s negligent advice. C argued that if they were made aware of the replacement clause’s effect, they would have acted to renegotiate with X, thereby minimising its losses. D argued that C could not show D was the factual cause of their losses.
Legal Issue
- Could C establish factual causation where the loss depended on the potential future decisions of X, an independent third-party to D?
Held
The Court of Appeal held that the claim could be assessed as a lost commercial opportunity. The claimants had to prove, on the balance of probabilities, that proper advice would have led them to seek contractual protection. The separate question of how the vendors would have responded concerned a hypothetical third-party decision. For that element, the claimants needed to establish a real and substantial chance of obtaining protection, rather than prove that success was more likely than not. A qualifying chance was then to be valued in damages. The approach did not remove the ordinary burden of proving what the claimants themselves would have done.
⭐ Legal Principle
Where negligent professional advice deprives a claimant of a commercial opportunity dependent on a third party, a real and substantial lost chance may be compensable. The claimant's own hypothetical conduct ordinarily remains subject to proof on the balance of probabilities.
Significance
Allied Maples is central to distinguishing proof of causation from valuation of a lost commercial chance. It avoids an arbitrary all-or-nothing result for negotiations dependent on another party, while retaining a meaningful evidential threshold. It should not be transferred uncritically to medical loss-of-chance claims, where cases such as Gregg v Scott adopt a different approach. The identity of the person whose hypothetical action matters is therefore an important first step in an examination answer.
Common exam questions about this case
Which part of the counterfactual required ordinary proof?
The claimants had to show that, with competent advice, they would have sought the necessary contractual protection. That concerned their own conduct and required proof on the balance of probabilities. Only after that question was satisfied did the court assess the chance that the vendors would have agreed.
Is a speculative negotiating possibility enough?
No. The lost opportunity must be real and substantial. The law can value uncertainty about another party's response, but it does not award damages for a purely speculative possibility. Evidence about bargaining positions, the proposed protection and the transaction helps establish and value the chance.
Why is Gregg v Scott a useful comparison?
Gregg concerns a medical outcome and an alleged reduction in survival prospects, rather than commercial negotiations with an independent third party. Allied Maples does not establish a universal right to damages whenever negligence reduces a chance. The type of loss and the applicable causation rule must be identified separately.